Higgins v. City of Santa Monica

• Decision Date: 05 November 1964
• Citation: 396 P.2d 41,62 Cal.2d 24,41 Cal.Rptr. 9
• Court: California Supreme Court
• Parties: , 396 P.2d 41 Thomas HIGGINS, Plaintiff and Appellant, v. CITY OF SANTA MONICA et al., Defendants and Respondents. L. A. 27989.

Page 9

41 Cal.Rptr. 9

62 Cal.2d 24, 396 P.2d 41

Thomas HIGGINS, Plaintiff and Appellant, v. CITY OF SANTA MONICA et al., Defendants and Respondents.

L. A. 27989.

Supreme Court of California.

Nov. 5, 1964.

Harold Judson, Michael P. Kelly, O'Melveny & Myers, Pierce Works, William W. Alsup and William D. Moore, Los Angeles, for plaintiff and appellant.

Robert G. Cockins, City Atty., James W. Shumar, Santa Monica, and Herman F. Selvin, Los Angeles, for defendants and respondents.

McCOMB, Justice.

Plaintiff appeals from a judgment in favor of defendants in an action to obtain an adjudication as to the validity of Santa Monica Initiative Ordinance 703, insofar as such ordinance prohibits drilling or prospecting for oil, gas, and other hydrocarbon substances upon the tidelands and submerged lands granted in 1971 by the State of California to the City of Santa Monica.

The case was submitted upon stipulated facts and stipulated issues, after which the trial court rendered judgment upholding the validity and enforceability of the ordinance and the legality of any expenditure of municipal funds in enforcement thereof.

Facts: In 1917 the Legislature granted to Santa Monica all tidelands within its municipal limits, subject to trust uses in aid of commerce, navigation, and fishery and other uses consistent therewith. (Stats.1917, ch. 78, p. 90; subsequently amended, Stats.1949, ch. 616, p. 1114.) The grant did not reserve to the State the mineral rights in the lands.

In 1939, by an initiative measure pursuant to the Santa Monica city charter, the electorate of the city adopted ordinance 703, which, in substance, declared the drilling or prospecting for oil, gas, or other hydrocarbon substances, and operations incidental thereto, within the municipal limits, to be a nuisance and unlawful. It imposed criminal sanctions by way of both fine and imprisonment and specified that any violation would constitute a separate offense for any day upon which the same occurred.

As of September 23, 1954, the City of Santa Monica entered into an agreement with General Petroleum Corporation (now Socony Mobil Oil Company, Inc.), whereby the latter was employed by the city to develop for oil, gas, and other hydrocarbon substances that part of the city lying seaward of the mean high tide line. The agreement, however, recognized the existence of, and was subordinated to, ordinance 703, which has operated to prevent its performance during its entire life to date.

In November 1954 and August 1960, propositions which would have permitted drilling on the tidelands at least one mile from the shore line were submitted to the electorate of Santa Monica. Each of these proposed measures was defeated.

Prior to November 1963, Socony Mobil and Signal Oil & Gas Company, its subcontractor under the 1954 contract mentioned above, submitted to the City of Santa Monica an exploratory drilling program, which was referred by the city to its consultant, E. R. Stanley. Mr. Stanley approved the same as to suitability and conformity to good oil field practices by responsible drilling and producing companies and recommended its approval by the city. The city attorney of Santa Monica concurred in such approval and recommendation.

During 1964 the City of Los Angeles established two off-shore oil drilling districts abutting on the south the Santa Monica tidelands, wherein drilling and prospecting for oil, gas, and other hydrocarbon substances may be initiated and carried on at the discretion of the appropriate authorities of the City of Los Angeles.

QUESTIONS: First. Is ordinance 703 of the City of Santa Monica, so far as it prohibits, with criminal sanctions, the drilling or prospecting for oil, gas, and other hydrocarbon substances on the Santa Monica tidelands, unconstitutional?

No. The ordinance, so far as it is applicable to the Santa Monica tidelands, amounts to a determination that the city does not desire to subject the public to the inconvenience, noisome effects, and potential dangers that may accompany and follow the exploration for, and production of, oil.

Such determination was made by the city council, the body lawfully charged in the first instance with setting the city's public policy. This determination was confirmed by its approval upon a submission to the people and by the rejection of two later attempts to repeal it, also submitted to the people.

The grant from the State did not impose a mandatory duty upon the city to develop the tidelands for oil. It simply transferred the lands to the city subject to certain trusts and conferred upon the city the right to lease the lands for uses consistent with the purposes expressed therein, explicitly phrasing that power in the words 'the city * * * may lease.' (Italics added.)

The uses and purposes to which the grant made the lands subject are, in general summary, navigation, commerce, and fishing. (City of Long Beach v. Marshall, 11 Cal.2d 609, 614, 82 P.2d 362.)

The original grant from the State specifically authorized the establishment, improvement, and conduct of a harbor; the establishment and construction of bulkheads and breakwaters for the protection of lands within its boundaries; and the construction, maintenance, and operation of wharves, docks, and similar structures and appliances necessary or convenient for the promotion or accommodation of commerce and navigation and the protection of the lands within the city; and it reserved to the people of the State the absolute right to fish in the waters of the harbor. The 1949 amendment provides that the lands may be used for recreational purposes to the extent not inconsistent with the other purposes.

Nothing in these uses and purposes requires or envisages the development of oil resources. Indeed, they may be deterrent of any such activity, for the structures employed in drilling and pumping for oil, when in place in the ocean, could be serious obstructions to, or interferences with, navigation, ocean-borne commerce, and fishing, as well as with recreational use of the beach, intensified in the two latter respects by the beach and water polluting capabilities of petroleum brought to and near the surface.

But for the ordinance, the city could, if it so desired, lease the lands for oil development purposes, so long as the purposes of the grant to it were not thereby impaired or impeded. ¹ (Cf. City of Long Beach v. Marshall, supra, 11 Cal.2d at p. 620(9), 82 P.2d 362.) The permissive power to lease in the grant is broad enough to embrace such an undertaking. The power, however, is plainly a discretionary one.

The city has exercised its discretion by determining as a matter of public policy not to develop whatever oil there may be under the tidelands. This it has done by enactment of ordinance 703.

No fraud or abuse of discretion being claimed or shown, the city's exercise of discretion is not subject to challenge or compelled revision; such exercise 'is not subject to control by the court, except to prevent an abuse by the trustee of his discretion.' (Rest. 2d Trusts (1959) § 187; see People v. California Fish Co., 166 Cal. 576, 597, 138 P. 79; Estate of Cousins, 111 Cal. 441, 449, 44 P. 182; Estate of Schandoney, 133 Cal. 387, 393, 65 P. 877.)

The usual rule is that a trustee is bound to use diligence to make a trust productive. What that means, generally, is that 'it is the duty of the trustee to invest trust funds so that they will be productive of income.' (2 Scott on Trusts (2d ed., 1956) § 181, p. 1348.)

Obviously, that is a rule designed for trusts intended to be productive of income or other gain. The reason for it is that the trustee's overriding duty is to effectuate the trust purpose. However, the reason for the rule requiring productivity ceases, and, accordingly, so does the rule (Civ.Code, § 3510), in the case of a trust not designed for an income or monetary purpose but for other purposes, such as holding and preservation of property for use by others.

Even in the case of money, where it is ordinarily a trustee's duty to make it productive by investing it, he is not under such a duty if the purpose of the trust was not investment or productivity but only safeguarding. (Allin v. Williams, 97 Cal. 403, 409, 32 P. 441; 2 Scott on Trusts (2d ed., 1956) § 181, p. 1349; Bogert, Trusts and Trustees (2d ed., 1960) § 611.)

This is true a fortiori in the instant case, where the purpose of the trust is not to make money but to hold the lands and overlying tidal waters in order to preserve and keep them available for the public's rightful use of them for commerce, navigation, fishing, and recreation, and where making the trust property productive by developing it for oil could very well defeat or impair the trust purposes.

Protection of a great highway of commercial intercourse and preservation of the public's opportunities of rest and relaxation from the cares of mundane existence are as commendable and proper governmental objectives as the making of money. Choice of the one in preference to the other cannot reasonably be said to be an abuse of the discretion vested in the city.

Ordinance 703 may be repealed or amended by the...